Tuesday, July 14, 2009

Cambodia Works to Promote Social Safety Nets

BY BUTH REAKSMEY KONGKEA

The Royal Government of Cambodia is working to reduce the impact of the global economic downturn on the nation’s economy through the creation of social safety nets. There will also be measures to increase agricultural productivity, diversify agricultural products, and accelerate land, fisheries and forestry reforms. In addition, new agricultural techniques will be introduced, rural infrastructure will be refurbished, loan markets modernized and expert procedures rationalized.

“I think that agricultural development is a central feature of our efforts to reduce poverty. If we can improve and strengthen our agricultural activities, we will then be able to reduce the impact of the economic downturn,” he said during his closing remarks to a National Forum on “Food Security and Nutrition: Social Safety Nets in Cambodia” on July 7.

The Premier said the government would design macro-economic policies to ensure economic stability. This will be achieved with the introduction of flexible, pro-growth financial policies and reforms. These will recreate confidence in the economy and attract investment from both domestic and foreign sources, especially in fast-yielding economic activities.

The Premier said that social protection is nothing new for Cambodian society. Indeed, traditional social safety nets are at the heart of Khmer culture and take the form of food sharing during festivals or times of emergency. Traditionally, monks play significant roles in these matters and today, they will join the Government in educating and supporting poorer members of the community, said Hun Sen. He added that rich people, businessmen, and officials of the Royal Government were also active in supporting the less fortunate. The Premier said the Cambodian Red Cross, a vital humanitarian agency, also has a role to play. It will help ensure the impartial distribution of goods to all who need them.

He added that the Government would continue to pay attention to the enforcement of Labor Laws, Insurance Laws and Social Security Laws. He continued, “I request all concerned ministries/institutions to strengthen cooperation with development partners, the private sector and other relevant institutions. Concerning the agriculture sector and rural development, dialogue among various national and sub-national ministries and agencies will continue. Thus, development programs will be brought to completion in an effective and timely manner. We will also ensure transparency in the use of resources provided by development partners,” he said.

He continued, “I acknowledge that efficient state intervention in social affairs requires coordination and cooperation from all relevant stakeholders. Different Ministries, Institutions and Development Partners must all pull in the same direction if an effective safety net is to be created.”

Hang Chuon Narong, Secretary General of the Ministry of Economy and Finance, and Permanent Vice-Chairman of the Supreme National Economic Council, said that five years prior to the global financial crisis, Cambodia had an average annual growth rate of 10 percent with an increase in personal income of up to 75 percent.

Narong said that the key pillars of the growth included agriculture, construction, tourism, manufacturing and the service sectors. He pointed out that the global financial crisis lowered Cambodia’s growth to 6.7 percent in 2008, and the looks set to fall to 2.1 percent in 2009. This will reduce the availability of revenue for the Government and increase the size of the national debt.

He added that export growth was only 8.5 percent while imports reached 22.8 percent in 2008. This created a 66.3 percent rise in the trade deficit, equivalent to 21.6 percent of Gross Domestic Product.

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